Few of us are able to avoid conflicts of interest. At some time during our lives, whether as private individuals or in business, we’ll be faced with potentially conflictual situations.
Many such conflicts are easily resolved, while others may involve difficult ethical or moral dilemmas. Suppose you put your house on the market and fail to mention that everyone in the neighborhood believes it to be haunted?
Even though the law might not require that you do so, should you reveal this fact to the superstitious and timorous couple who seem ready to make an offer? Wouldn’t this scare them away and cost you a sale? Wouldn’t it be ethical to tell them, and save them from “ghoulies and ghosties … and things that go bump in the night”?
Such a conflict of interest might seem light-hearted and unlikely, but the continuing conflicts of interest that bedevil our City Council members are serious and difficult to resolve.
Council members, as mandated by the City Charter, must also serve as the board of directors of Colorado Springs Utilities.
Those who object to such a dual role usually stress the obvious — that nine unpaid small-town politicians are not well suited to direct the affairs of a billion-dollar enterprise. That fact is not easily rebutted, except by comparing the performance of CSU to its peers.
Interestingly, CSU is at or near the top when judged by every traditional metric, which might speak well for the elected officials who have provided policy guidance — or might simply speak to the irrelevance of corporate boards.
Our elected council members must act in what they perceive to be the best interests of the city and its residents and uphold the City Charter. As members of the utility board, they are both fiduciaries and policymakers, charged with preserving the integrity of the enterprise while acting in the best interests of its municipal owners.
However, these duties are often in opposition.
If CSU were a private corporation, no council member, however well-qualified, could ethically serve on its board, just as no council member can presently serve on Comcast’s board. As an elected official, you can’t have a fiduciary duty to a company that you regulate.
CSU and the city are not two divisions of the same parent corporation. In fact, if not in law, they are separate entities, often with opposing interests.
For example, should streetlights be funded from general city revenue or should the cost of installing and maintaining them become a CSU responsibility?
Should CSU be required to provide water to the parks at a reduced rate or should the city just let the parks deteriorate?
Should CSU, as a city-owned enterprise, be required to make the kinds of staff reductions that the city has been forced to make?
Because the passage of Issue 300 will require the phase-out of payments in lieu of taxes to the city from CSU, should council sell all or a part of the enterprise and benefit both from a one-time payment and from the tax revenue that would flow from a privately owned utility?
Many of these issues can only be decided by the voters, while others are still within council’s powers.
We do suggest that council members recognize that their sworn duty is to uphold the federal and state constitutions, and the charter of the City of Colorado Springs. Without exception, their duty to the city must always trump their obligations to CSU.
And by even the most liberal interpretation of their oath of office, they are precluded thereby from handing over control of CSU to an appointed board — conflicts or no.